Canadian convenience store giant Alimentation Couche-Tard Inc’s proposed takeover of Japanese retail giant Seven & i Holdings Co is subject to a review by the Japanese government for potential national security threats, business agency Kyodo News reported on Aug. 22.
The operator of the Seven-Eleven convenience store chain is subject to the Foreign Exchange and Foreign Trade Act, which regulates foreign investment in Japanese companies to prevent the leakage of technology that could be used for military purposes.
The law requires listed domestic companies and their subsidiaries operating in certain industries, such as aviation, cybersecurity or infrastructure, to notify the government if foreign investors acquire a stake of 1 percent or more.
Although the convenience store business, which is Seven & i’s core business, is not a designated industry, the Treasury has applied the rule to the firm. However, it did not disclose which of Seven & i’s businesses the rule applies to.
The notification to the Japanese government must include information on the size and timing of the foreign investment, as well as the extent of the foreign investor’s involvement in management.
The government can block the investment if it believes the acquisition will cause economic security problems. Failure to notify or providing false information can result in imprisonment or fines.
Seven & i has numerous corporations under its umbrella and the holding company owns shares in companies in sectors such as retail, real estate, finance, livestock, petroleum products and security services, according to its founding documents.
Earlier this week, Seven & i said it had received a preliminary offer from Alimentation Couche-Tard, which operates brands including Couche-Tard and Circle K, to acquire all of its outstanding shares.
This statement caused the company’s share prices to skyrocket.
Source: Rossa Primavera
I am Michael Melvin, an experienced news writer with a passion for uncovering stories and bringing them to the public. I have been working in the news industry for over five years now, and my work has been published on multiple websites. As an author at 24 News Reporters, I cover world section of current events stories that are both informative and captivating to read.